Wednesday's morning market report offers a preview to the Mortgage Bankers' Association's Mortgage Activity Report, the EIA's Petroleum Status Report and the day's earnings and corporate schedule. The government is busy today debating the budget, analyzing the consumer protection agency, and discussing offshore drilling. American Superconductor and Cephalon lead the corporate wire on disturbing news.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Look for the latest mortgage activity data from the Mortgage Bankers Association (MBA) in the premarket hours Wednesday. Last week's data showed that as rates moved back up on easing concerns about the Middle East and Japan, reduced levels of mortgage refinancing activity led overall mortgage activity lower. For the period ending March 25, the Market Composite Index of mortgage activity fell 7.5% on a seasonally adjusted basis. The Refinance Index dropped 10.1%, as contracted rates on fixed rate mortgages of 30-year and 15-year durations increased to 4.92% (from 4.8%) and 4.16% (from 4.02%), respectively. Purchase activity also eased, but by just 1.7% on a seasonally adjusted basis, as the spring buying season is getting underway.

At 10:30 AM ET, look for the regular Petroleum Status Report from the EIA. Last week's report covering the period ending March 25 showed crude oil inventory increased by 2.9 million barrels, as oil flowed out of Libya and as Saudi Arabia scrambled to increase production of gasoline-favorable oil to make up for the Libya disruption. Total motor gasoline inventory decreased by 2.7 million barrels, and so the effect at the pump was nil to negative. Gas prices are in fact up for the last 15 days straight, and stand 20% higher than in January. Oil stocks are above the upper limit of the average range for this time of year, but gasoline is only within the upper range for this time of year. This report is garnering an intensifying level of attention due to the strain provided by the Middle Eastern turmoil.

U.S. legislators are still debating the fiscal 2011 budget, with the threat of government shutdown now a distinct possibility, if not likelihood. The Greek is expecting a government shutdown, as the perception of the general public would be a negative one for President Obama. Yes, this is a political matter, and we are being toyed with by our government for the sake of political perception. Thanks a lot Washington; this is not why I took time to vote.

In other DC happenings, a House Financial Services subcommittee examines the Consumer Financial Protection Bureau today. A House Energy subcommittee will be holding a hearing on offshore drilling.

World Bank President Robert Zoelick addresses the effects of Middle Eastern turmoil on the global economy. As usual, the World Bank comments after the fact, when the news is history and more clearly visible to it. These global organizations, the World Bank, OECD and the IMF tend to just repeat what you hear from the Federal Reserve and the European Central Bank, rendering them as "parrots," in Greek terminology. In other comical international happenings that are better found in comic books than world news, Italian Prime Minister Silvio Berlusconi stands trial for the abuse of his office.

Corporate Wire

American Superconductor (Nasdaq: AMSC) was down 47% in premarket trading, after the maker of electrical systems for wind farms said it would post a loss for its fourth quarter. The company said its most important customer, Sinovel Wind (601558.SS) - a Chinese company, refused to accept ready shipments. This leaves AMSC in need of capital to complete its acquisition of a Finnish company, which it had ironically targeted in order to diversify its customer base.

Cephalon (Nasdaq: CEPH) rejected Valeant Pharmaceutical's (NYSE: VRX) $5.7 billion hostile bid. The offer places CEPH's shares at $73; the company is trading at $77+, as investors contemplate a better option might develop. If one does not, we might see CEPH shares give back some ground soon. The shares had spiked up from below $60, and so the fall could be steep without a new offer from VRX or another player, which we expect CEPH managers anticipate (they had better be right).

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